What needs to done and who knows how to do it are still valid questions about the year 2000 issue. And Congress is taking a step toward these solutions with a bill, HR 4455, introduced by Congressman David Dreier (R-Calif.). The proposed Year 2000 Readiness Disclosure Act does not mandate, or even offer, solutions. Rather, it is designed to encourage companiesby protecting them from potential lawsuitsto make statements about how the Y2K problem will affect them. Said Dreier, in introducing the bill, it gives companies the liability protection they need to make statements about year 2000 compliance efforts, knowing that theyre not just pouring gasoline onto some litigation bonfire.
The bill basically says that unless a company knowingly makes a false statement, its Y2K readiness disclosure is not admissible in a lawsuit. The bill also recognizes the Web as a venue for issuing statements about Y2K readiness: In any covered action in which the adequacy of notice about year 2000 processing is at issue, and except as provided by contract, the posting of a notice by the entity purporting to have provided such notice on that entitys year 2000 Internet Web site shall be presumed to be an adequate mechanism for providing such notice.
The bill enjoys wide industry support. The AICPA and other professional, business and manufacturing organizations sent a letter to President Clinton urging him to sign it. The letter says, Your support of HR 4455 will go a long way in encouraging information exchange that we believe will happen among our members if the right legislation is passed. Other signatories included the American Bankers Association and the American Insurance Association.
At Journal press time, a spokesman from Dreiers office said the House was working on a compromise bill with the Senate. Although changes were expected, he thought the basic idea behind the bill would remain unchanged. He said Dreier hoped Congress would pass the revised bill and give it to the president to sign before the session ended in October.
The billabout 13 pagesand all Congressional Record references to it are available at http://thomas.loc.gov .
Ms. Smith Goes to Washington
Capitol Hill may be the hunting ground of big business and the lobbyists they hire, but a small-firm CPA found a way to make herselfand her small business clientsheard in Washington.
Sandra Abalos, sole partner of a six-person firm in Phoenix, recently served as a delegate from the National Federation of Independent Business (NFIB) to the Congressional Small Business Summit. The meeting consisted of two days of sessions on a variety of issues important to small businessesincluding taxation. The NFIB is pushing to have the entire tax code thrown out. It wants something fairer and simpler, said Abalos, and shes delivered that message to influential legislators in D.C.
However, in the midst of the often emotional debate surrounding radical tax reform proposals, Abalos said she approached the reform discussions with caution. A lot of peopleincluding business ownersdont understand how hard it is to create a system thats fair and simple. There are unintended consequences. She said that, in the 1980s, tax benefits associated with real estate investments fueled a building boom in Arizona. The 1986 tax reforms eliminated these benefits too quickly. Limited partners couldnt afford to subsidize the investments without the tax breaks and they went under. Savings and loans followed. So we may have saved money on our personal income taxes, but we all had to pay to save the S&Ls. She made these thoughts clear at the summit, and was proud thatas another attendee told her afterwardshe was the voice of reason.
A Washington insider
This was not Abalos first visit to the capital. In 1995 she campaigned to be, and was elected, an Arizona representative to a White House small business conference. She became vocal in her support of small business issues. I grabbed the microphone and started talking, and I was thinking, well, theyre not snatching it away from me. She got noticed by other attendees, and the White House appointed her the conferences regional tax implementation chairperson. Abalos also had the opportunity to testify before a congressional committee on the independent contractor issue. For her work in Washington, she was named 1996 SBA National Accountant Advocate of the Year.
CPAs are in a perfect position to advise the government on tax issues. We work with taxes every day. I can tell you in a few minutes how a proposed regulation would affect the owner of a golf course or a retail store. Sometimes legislators look just at the big picture, not at how a new law would affect each small business.
She said any CPA could get involved in Washington. It takes time and work and resources. You really have to want to do it. I do.
Jackson Wins AICPA Government Award
The AICPA recently named Norwood J. Jackson, Jr., the 1998 Outstanding CPA in Government. He is the deputy controller of the Office of Federal Financial Management, Office of Management and Budget.
During nearly three decades of service in state and federal government, Jackson has been an unfailing advocate for better accounting, auditing and financial management. Most recently, he instituted a comprehensive program to improve federal financial management and reporting. He also directed the development of government wide guidelines for the management of federal grants, cost principles for reimbursements and audits of federally funded activities.
Jackson is a frequent speaker on the subject of federal financial management and coauthored the article Auditing Federal Awards: A New Approach (JofA, Nov.96, page 53).
The Outstanding CPA in Government Award is bestowed annually on a CPA in government who has made a significant contribution to increased efficiency and effectiveness. The award also recognizes CPAs who have promoted the growth and enhancement of the profession.